IHG Becomes Latest Big Hotel Company to Cut Group Commissions

InterContinental Hotels Group (IHG) has become the latest hotel company to cut its group commission levels.

Effective January 1, 2019, sales commissions paid to global group travel partners will be reduced from 10 percent to 7 percent at all IHG properties in the United States and Canada, IHG SVP of Global Sales Derek DeCross tells Travel Agent.

“This move allows us to balance the needs of our guests and owners by reinvesting the savings into programs and improvements that will benefit the guest experience,” DeCross said.

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The policy change includes bookings made at Kimpton Hotels & Restaurants properties in the United States and Canada. Contracts signed prior to January 1, 2019, however, will still be eligible for the 10 percent commission, and commissions for IHG hotels outside of the United States and Canada will remain unchanged. Bookings at IHG hotels in Puerto Rico are also not impacted and will remain unchanged.

IHG represents 5,367 hotels across 13 brands worldwide, with another 1,718 hotels in the development pipeline. In addition to Kimpton, some of the company’s notable brands include InterContinental Hotels & Resorts, Even Hotels and Holiday Inn.

The move puts IHG in line with a number of other major hotel companies that have cut commission levels over the past year. On March 31 Marriott International, which became the largest hotel company in the world following its merger with Starwood, put into effect its commission cut from 10 to 7 percent at its properties in the United States and Canada. Last month, competitor Hilton followed suit with its own 10 percent to 7 percent commission cut, which will take effect October 1 at its properties in the United States and Canada.

The commission cuts have drawn broad criticism from travel industry leaders, with executives at organizations such as the American Society of Travel Agents (ASTA) and Travel Leaders arguing that the decisions downplay the value travel agents bring the the group booking process.

At the same time, the moves by Hilton and Marriott have prompted other hotel groups to offer temporary group commission increases. Eden Roc Miami Beach, Nobu Hotel Miami Beach and Nobu Hotel Los Cabos have all increased their group commission from 10 percent to 12 percent on newly contracted groups that book a minimum of 10 rooms per night now through December 31, for travel anytime. Dream Hotel Group is likewise offering a 12 percent commission on qualified groups and meetings that are booked and actualized in 2018. In February, shortly after Marriott announced its decision, a representative from Wyndham Hotel Group also told Travel Agent that the plan was to hold its group commissions steady, “with no plans to adjust in the near future.”